OGH on Warranty Exclusion in Used Car Sales

Jun 7, 2024 Benn-Ibler Rechtsanwälte

Signs of wear and tear in accordance with the age and mileage of a vehicle must be expected by the buyer of a used car. Nevertheless, the vehicle should be in a condition which the market would normally expect.

In 2021, the defendant offered his car for sale on the internet. The plaintiff bought the car for EUR 10,000, and the parties agreed in the written contract of sale to exclude any warranty and any defence of mistake.

On delivery, the odometer read 188,560km, but the car had been driven at least 214,221km. The car was also found to be defective on delivery: The front brake pads had almost worn out, the engine had a slight oil leak around the intake manifold, and the rear-light lenses were damaged. The defendant, however, had never stated that the car was in top condition.

The plaintiff sought to rescind the purchase agreement on the grounds of fraud, mistake, and warranty.

The trial court rescinded the sale, and the appellate court affirmed. The defendant filed an appeal against the decision of the court of appeal.

The Austrian Supreme Court’s (Oberster Gerichtshof, hereinafter OGH) decision was as follows:

The roadworthiness and operational safety of a used car is usually a quality that is generally assumed and for which the seller is responsible. This does not apply if both parties have agreed on an exclusion of warranty. Outside the scope of application of Section 9 of the Austrian Consumer Protection Act (Konsumentenschutzgesetz, KSchG), a contractual exclusion of warranty is permissible under Section 929 of the Austrian Civil Code (Allgemeines bürgerliches Gesetzbuch, ABGB).

According to OGH case law, a vehicle’s roadworthiness and operational safety can only be considered conclusively guaranteed if the car was purchased from a commercial vehicle dealer, thus overriding any warranty waiver. If the seller is not a commercial vehicle retailer, a final guarantee of road and operational safety is only possible in special circumstances.

As it could not be proved that the odometer had been tampered with, the sales contract could not be rescinded on the grounds of fraudulent misrepresentation. Similarly, the plea of error could not be raised due to the exclusion of the contract.

OGH 4 Ob 215/23f (4 April 2024)